Santa Ana will pay former manager $700K in deal

Feb. 20, 2013

Updated Aug. 21, 2013 1:17 p.m.

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Paul Walters, who had served for a year as interim city manager of Santa Ana and as its longtime police chief, was hired as city manager in June 2012. He submitted his resignation, effective Feb. 1. RON GONZALES, THE ORANGE COUNTY REGISTER

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Paul M. Walters had been city manager of Santa Ana until his resignation, effective Feb. 1. COURTESY PHOTO

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Paul M. Walters was appointed the city manager of Santa Ana in June, after serving as its police chief. Following a Jan. 22 dismissal vote, he resigned, effective Feb. 1. The city's police building will be named for him, under terms of a severance agreement. JEBB HARRIS, ORANGE COUNTY REGISTER

Paul Walters, who had served for a year as interim city manager of Santa Ana and as its longtime police chief, was hired as city manager in June 2012. He submitted his resignation, effective Feb. 1.RON GONZALES, THE ORANGE COUNTY REGISTER

SANTA ANA – The city will pay out more than $700,000 under the severance agreement struck with former city manager Paul M. Walters.

Walters resigned, effective Feb. 1, after a 6-1 vote Jan. 22 vote by the City Council to begin the process of releasing him from his contract.

Under terms of the agreement he struck with the city, Walters will serve as Santa Ana's law enforcement liaison for a year, and the city's police headquarters will be named for him within 24 months.

An employment agreement provides for a one-year term in the position with a salary of $264,999, plus medical benefits and Public Employees Retirement System service credit.

The city also will pay for two years of military service credit to be added to his PERS retirement benefits and will pay Walters for unused vacation time and sick leave in up to four payments over the next two years.

Under terms of the payout, Walters will receive $264,999 as the one-year base salary, $101,425.68 for the cost of medical and other insurance, including a one-year contribution to the retirement fund; $164,553.90 to purchase two years of U.S. Air Force military service credit toward retirement through PERS; $167,918.27 in unused vacation, holiday and sick time to be paid out in four installments of nearly $42,000 each; and $7,500 in attorney fees.

The total comes to $706,396.85.

Councilman Sal Tinajero, the city's mayor pro tem, said at least $423,917, the combined cost of his one-year salary and unused leave, would have gone to Walters under terms of his city manager contract, putting the cost of his exit about $282,000.

"City managers will at the front end negotiate their exit package," Tinajero said. "We came to terms with that extra level," he added, "to be able to move forward. He wanted more, and we negotiated it down to that portion."

Tinajero said that in the long run, the departure of Walters will save the city money because of a restructuring plan for City Hall offices. The city also saved money during the time that Walters served as both interim city manager and as chief of police, and as a result of a deputy city manager position remaining unfilled.

Some residents urged the council to keep Walters in place while they searched for a new city manager.

"I don't think that would have saved money," Tinajero said. "We would have still had to negotiate an exit plan, and we couldn't move forward with the plan to restructure our administrative offices. We would have been in the same place, if not a worse place."

The key elements of the agreement, which was signed Feb. 1 and released last week, mirrored terms that had been established in Walters' city manager contract, with concessions on both sides.

Walters' contract allowed him to return to the police chief slot if he resigned or was terminated. If he chose not to return after being terminated, the contract called for him to receive severance of one-year base salary – $265,000 – or three years and eight months of military service added to his PERS retirement benefits. It also called for him to be compensated for unused leave. In the event of voluntary resignation, his contract said he wasn't entitled to severance pay.

Walters, who became police chief in 1988, was appointed city manager in June 2012 after having been named to the interim city manager position in May 2011.

The council last week appointed Kevin O'Rourke as interim city manager. He has served as an interim city manager in Stockton and Woodland, and as city manager in Fairfield, Buena Park and Stanton.

The City Council on Tuesday approved an employment agreement with O'Rourke, who is expected to serve about six to nine months while the city recruits a permanent city manager. Under terms of his agreement, he will receive $22,083 monthly salary. O'Rourke of Fairfield will also receive travel expenses of up to $4,000 a month for the first 60 days, and up to $2,700 a month afterward. He would also be allowed to use a city car for personal and city business.

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